Shah Hiralal Buildcon LLP, Ahmedabad V. ACIT, Central Circle-1(2), Ahmedabad

ITSSA 287/AHD/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 9453 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 04-01-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 15-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: JWALIN NANAVATI
• Keywords: Unexplained cash credit; Unexplained investment; Unexplained expenditure; Business income; Business expenditure; Income from undisclosed sources; Search and seizure; Document seized; Opportunity of being heard; Initiation of penalty proceedings; Corroborative evidences; Revised return; Documents seized; Set aside
• Section: 68; 132; 144; 44AD; 69C; 40A(3); 143(3); 158BC; 153C

Judgement Text

आयकर अपीलीय अिधकरण, अहमदाबाद ᭠यायपीठ IN THE INCOME TAX APPELLATE TRIBUNAL, ‘’ B’’ BENCH, AHMEDABAD (CONDUCTED THROUGH VIRTUAL COURT AT AHMEDABAD) BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT And SHRI WASEEM AHMED, ACCOUNTANT MEMBER Assessee by : Shri Jwalin Nanavati, A.R Revenue by : Shri Alokkumar, CIT. D.R सुनवाई कᳱ तारीख/Date of Hearing : 15/12/2021 घोषणा कᳱ तारीख /Date of Pronouncement: 05/01/2022 Sl. No(s) IT(SS)A No(s) Asset. Year(s) Appeal(s) by Appellant vs. Respondent Appellant Respondent 1-3. 286 to 288/Ahd/2018 2012-13 to 2014-15 Shah Hiralal Buildcon LLP, 801, Abhishree Avenue, Nr.Nehru Nagar Circle, Ambawadi, Ahmedabad. PAN: ABZFS8483M A.C.I.T., Central Circle-1(2), Ahmedabad. 4. 330/Ahd/2018 2012-13 D.C.I.T., Central Circle-1(2), Ahmedabad. Shah Hiralal Buildcon LLP, 801, Abhishree Avenue, Nr.Nehru Nagar Circle, Ambawadi, Ahmedabad. PAN: ABZFS8483M 5-7. 323 to 325/Ahd/2018 2013-14 to 2015-16 D.C.I.T., Central Circle-1(2), Ahmedabad. Shah Hiralal Buildcon LLP, 801, Abhishree Avenue, Nr.Nehru Nagar Circle, Ambawadi, Ahmedabad. PAN: ABZFS8483M (Applicant) (Respondent) IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 2 आदेश/O R D E R PER WASEEM AHMED ACCOUNTANT MEMBER: The captioned seven appeals have been filed at the instance of Assessee and Revenue against the respective orders of the Learned Commissioner of Income Tax (Appeals), Ahmedabad arising in the matter of assessment order passed under s. 143(3) r.w.s. 153C of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year as mentioned in the cause title. 2. First we take assessee’s appeal bearing IT(SS)A No. 286/Ahd/2018 for A.Y. 2012-13. The assessee has raised the following grounds of appeal: 1. Ld. CIT (A) erred in law and on facts in confirming addition of Rs.4,02,00,000/- on substantive basis of being profit margin @ 20% of unaccounted booking receipt ignoring fact that profit element of unaccounted receipt has already been offered by the appellant. Ld. CIT (A) ought to have considered the submission of appellant and ought not to have made substantive addition as appellant offered 8% profit of unaccounted booking receipt. It be so held now. 2. Ld. CIT (A) erred in law and on facts in confirming Rs. 4,02,00,000/- on substantive basis by applying 20% profit margin on Rs. 20.10 Crore (unaccounted booking receipts pertaining to this year)ignoring fact that appellant has already offered Rs. 81,00,000/- being profit margin @ 8% of project as a whole. Ld. CIT (A) ought to have considered submission of the appellant and ought to have restricted profit margin @ 8% rightly offered by the appellant. It be so held now. 3. Ld. CIT (A) ought to have considered profit margin for project as a whole and not for particular year and ought to have allowed telescoping of surplus/deficit in year in which profit from unaccounted booking receipt is disclosed higher as compared to determine by CIT (A). It be so held now. 4. Levy of interest u7s 234A, 234B, 234C of the Act is unjustified. 5. Initiation of penalty proceedings u7s 271(l)(c) of the Act is unjustified. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. 3. The assessee vide letter dated 09/10/2020 and 13/08/2021has also raised the additional grounds of appeal which read as under: IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 3 a. Appellant craves leave to raise this additional ground of appeal before the Hon'ble ITAT. This is a legal ground and therefore as per the decision of Hon'ble Supreme Court in the case of National Thermal Power (229 ITR 383) it can be raised before the Hon'ble ITAT. 1. Both the lower authorities erred in law and on facts in framing assessment on the basis of material found from the premises of third person and addition was made on that basis ignoring fact that amended provision is brought in statute from 01/06/2015 and applicable prospectively. It be so held now. Appellant also craves leave to add, amend, alter, change, delete and edit the above ground of appeal before or at the time of the hearing of the appeal. b. Appellant craves leave to raise this additional ground of appeal before the Hon'ble ITAT. This is a legal ground and therefore as per the decision of Hon'ble Supreme Court in the case of National Thermal Power (229ITR 383) it can be raised before the Hon'ble ITAT. 1. Both the lower authorities erred in law and on facts in framing assessment on the basis of material found from the premises of third person and addition was made on that basis ignoring fact that amended provision is brought in statute from 01/06/2015 and applicable prospectively. It be so held now. 2. The order passed is required to be quashed as JCIT has given approval u/s 153D of the Act within short period of time in mechanical manner without detail deliberation. Appellant also craves leave to add, amend, alter, change, delete and edit the above ground of appeal before or at the time of the hearing of the appeal. 4. The solitary issue raised by the assessee in the ground Nos. 1 to 3 of its appeal is that the learned CIT (A) erred in computing the taxable income at the rate of 20% of the unaccounted receipt against the income offered at the rate of 8% of such unaccounted receipt and furthermore not considering the profit margin as a whole for the project after allowing the benefit of telescoping. 5. The facts in brief are that the assessee in the present case is a LLP and engaged in the business of project development. The assessee in the year under consideration was in the activity of developing its residential cum commercial project under the name and style of Shiv Someshwar located at Althan Surat. 5.1 There was a search and seizure operation under section 132 of the Act dated 4 th December 2014 at Barter group who was alleged to be a group of entry provider. During the search proceedings, there were discovered many documents of IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 4 incriminating nature pertaining to the assessee. Thus, the proceedings under section 153C of the Act were initiated. 5.2 The assessee, in the assessment proceedings, has admitted to have received unaccounted money in cash for Rs. 35.48 crores in different assessment years against the booking of properties of its project as detailed under: S.No. Particulars Assessment year Amount 1. On Money receipt 2012-13 20,10,00,000.00 2. On Money receipt 2013-14 72,39,180.00 3. On Money receipt 2014-15 14,65,60,820.00 4. On money receipt 2015-16 NIL 5.3 As per the assessee, the impugned amount of cash receipt against the booking of the properties is the business receipts which has been utilized for the purchase of land and construction expenses. Accordingly the assessee, claimed that there was the element of unaccounted cash payment for the purchase of land of Rs. 16.44 crores which was registered dated 14 March 2012 for Rs. 5,49,78,000/- only. Thus the aggregate land cost was at Rs. 21.94 crores approx. which was paid out of booking receipts. Likewise, there were expenditures incurred for the construction of the project which is also verifiable from the seized documents found during the search proceedings out of booking receipt. The assessee in support of its contention filed the cash flow statement. Thus, according to the assessee the entire amount of cash receipt and cash payment cannot be treated as income based on the individual documents found during the search proceedings. But the element of profit embedded therein can only be added to the total income. Thus the assessee offered 8% of such unaccounted receipt pertaining to the different assessment years as income. 5.4 However, the AO was not satisfied with the submission of the assessee on the reasoning that certain documents of incriminating nature were found during the search proceedings and therefore the addition is required to be made based on such IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 5 documents. According to the AO, there were seized document bearing No. 1 and 4 of annexure A1 and 10 of annexure 10 wherein receipt of ₹ 23,18,38,000.00 crores was shown from four different persons being individuals who were directly or indirectly connected to the company namely M/s Anshunath Buildcon Pvt. Ltd. which is a partner in the present LLP (the assessee) to the tune of 68%. Thus, according to the AO such amount was representing the contribution towards the project of the assessee which has been utilized as under: S.No. Particulars amount 1. Purchase of land in cash Rs. 16,44,00,000/- 2. Purchase of land disclosed in the documents Rs. 5,49,78,000/- 3. Expenses incurred in cash Rs. 1,24,38,000/- 5.5 As per the AO, cash flow statement and property wise receipt is nothing but afterthought. Furthermore, there was no voucher signed by the customer available on record. Similarly, there was no confirmation filed by the assessee suggesting that impugned receipt is against the booking of the property 5.6 The assessee has started showing the receipt against the booking from the financial year 2012-13 corresponding to AY 2013-14 but there was no such booking receipt shown in the year under consideration. Furthermore, the land was purchased by the assessee dated 14 March 2012 i.e. at the fag end of the year under consideration and therefore it was not possible for the assessee to have received the booking advances without purchasing the land. Moreover, the contention of the assessee that cash amount of Rs. 16.44 crores was paid out of booking receipt of Rs. 44.08 crores is not acceptable. It is for the reason that the assessee is offering the income of ₹3.54 crores being 8% of 44.08 crores which is not sufficient to meet the payment of Rs. 16.44 crores. Thus the AO, held that the cash amount of Rs. 16.44 crores paid against the purchase of land is not from the booking receipt. Indeed, the same is out of the receipts from 4 person related to partner M/s Anshunath Buildcon Pvt Ltd but the assessee failed to explain the sources of cash. Hence, the AO treated the cash payment of ₹ 16.44 crores for the purchase of land IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 6 as unaccounted investment under section 69C of the Act and added the same to the total income of the assessee. 5.7 Likewise, the AO found that the assessee has not submitted the cash book, details of the expenses incurred against the receipt of cash of ₹ 1,24,38,000/-. Furthermore, the vouchers of the expenses furnished by the assessee do not contain the TIN. Moreover, the expenses claimed to have been incurred even before the purchase of land which doesn’t appear to be true. However, the AO found that a sum of Rs. 89,38,000/- out of the total expense of Rs. 1,24,38,000.00 pertains to the year under consideration and the balance amount pertains to the AY 2013-14. Thus, the AO made the addition of ₹ 89,38,000/-, treating the same as unexplained expenditure, to the total income of the assessee. 5.8 The AO with respect to the amount shown to have been received as booking amount of Rs. 44.08 crores found that the assessee has offered 8% of such amount as income during the assessment proceedings. However, the assessee has not furnished any details of the expenses incurred against such receipt such as PAN, name and address of the parties with the confirmation about the payment to such parties. Accordingly, the AO was of the view that no deduction of the expenses can be given to the assessee against such unaccounted receipt in the absence of supporting evidences. 5.9 Without prejudice to the above, the AO also observed that even if the contention of the assessee is considered for allowing the deduction of the expenses against the unaccounted receipt of Rs. 44.08 crores then also no benefit can be extended to the assessee by virtue of the provisions of section 40A(3) of the Act. It is for the reason that the expenses have been incurred in cash which are not available for deduction under the provisions of section 40A(3) of the Act. 5.10 The AO further found that the assessee has started showing receipts against the projects from the financial year 2012-13 corresponding to assessment year IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 7 2013-14 in its books of accounts. Accordingly, as per the AO, the unaccounted receipt of ₹44.08 crores should have been allocated in the financial years 2012-13 to 2014-15 in the ratio of receipt shown by the assessee. Thus the AO allocated the same on substantive basis as detailed under: F.Y 2012-13 2013-14 2014-15 Receipt shown by Shah Hiralal Buildcon in books of accounts 70,35,700/- 6,46,05,875/- 3,11,42,800/- Proportionate cash receipt by assessee from Shiv Someshwar project 3,01,73,230/- 23,90,35,520/- 13,35,58,687/- 5.11 The AO, however, found that the assessee has claimed to have received such unaccounted booking advance in the assessment years beginning from assessment year 2012-13 to 2014-15 which has been elaborated in the preceding paragraph. Thus the AO under protective basis made the addition of the unaccounted receipt as shown by the assessee in different assessment years. 6. Aggrieved assessee preferred an appeal before the learned CIT (A). 6.1 The assessee before the learned CIT (A) submitted that there were found several documents which were seized during the assessment proceedings. However, the AO has not considered all the seized documents while computing the taxable income of the assessee. There were other seized documents where details of the expenditures were recorded but the AO has ignored the same while quantifying income of the assessee. As per the assessee, all the seized documents should be considered while working out the taxable income instead of considering the seized documents based on pick and choose method. 6.2 The assessee further submitted that the amount of unaccounted cash receipt stands at ₹ 35.48 crores and the assessee has nowhere accepted the receipt of unaccounted cash at ₹ 44.08 crores. IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 8 6.3 The allegation of the AO based on the seized document that the assessee has received a sum of ₹ 23.1838 crores from the four persons is also not correct. It is for the reason that there were entries appearing on such seized document about the receipt of cash against the booking of flats/properties. But the AO has ignored the same set of documents and has reached to the conclusion to have received a sum of ₹ 23.1838 crores from the 4 persons as contribution towards the cost of the project. Thus the AO has taken the contradictory stand based on the same set of seized documents. 6.4 It is a common practice in the real estate activities that the assessee to acquire the land enters into different kinds of understanding with land owner and commences commercial activities. Thus no adverse inference can be drawn against the assessee merely on the reasoning that the land where project was to be constructed was purchased by the assessee vide registration deed dated 14 March 2012. 6.5 In view of the above the assessee submitted that the entire amount of on money cannot be treated as income. Rather the percentage of profit on the unaccounted receipt of money in cash can be brought to tax under the provisions of the Act. 7. However the learned CIT (A) after considering the submission of the assessee deleted the addition made by the AO in part by observing as under: a. Finding of the learned CIT (A) for the addition made by the AO for ₹16.44 crores i. The learned CIT (A) after considering the submission of the assessee observed that there were found various documents which were seized during the search proceedings at Barter Group/ Accommodation Entry Provider Group pertaining to the assessee. These seized documents are marked as under: IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 9 S. Nos. Particulars of seized documents 1. Page No. 44 of Annexure A-1 2. Page No. 47 of Annexure A-1 3. Page No. 37 of Annexure A-1 4. Page No. 39 of Annexure A-1 5. Page No. 4 of Annexure A-3 6. Page No. 1 of Annexure A-3 ii. The learned CIT (A) analyzed each and every seized documents as discussed above and found that these seized documents were containing the receipt of money against the booking of flats/shops as well as the expenditures incurred on the construction/ purchase of land/ other connected expenditures. Some of the seized documents were dated and some of the documents were undated. Nevertheless, all these documents have to be read in conjunction with each other and harmoniously/ in totality instead of making the partial reference to these documents in order to reach to the logical conclusion. The 1 st seized document bearing page No. 44 of annexure 8 was containing the date i.e. 1 October 2011 wherein the booking amount and the expenses including the construction expenses were recorded. The learned CIT (A) found that there is correlation and connection in all these seized documents and that too in a chronological order. Based on these seized documents and after analyzing the same, the learned CIT (A) concluded that the assessee has received the booking amount and incurred the expenses towards the construction of the project, purchase of land and other expenditures even before the registration of the purchase deed for the land. iii. With respect to the allegation of the AO that there was the contribution of fund by the 4 persons connected directly or indirectly to one of the partner of the assessee namely M/s Anshunath Buildcon P Ltd. which was utilized for the purchase of the land, the learned CIT (A) observed that the name of these 4 persons do not match with the partners except one namely Shri Nitinbhai Kalubhai Desai who was holding 15% share in the assessee firm. However, as per the seized document, IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 10 there was no shareholding of Shri Nitinbhai Kalubhai Desai in the amount paid for the purchase of the land. Furthermore, the shareholdings as recorded in the seized document do not match with the shareholding of the partners of the firm as provided in the partnership deed. Moreover, the names of the partners are not appearing in the seized documents and therefore the allegation of the AO that the contribution has been made by the partners is contrary to the facts on record. At the most, these transactions recorded in the seized documents could have been considered in the hands of the persons whose names are recorded in the seized documents in abbreviation form. Thus there was no evidence suggesting that the contribution was made by the aforesaid 4 persons on behalf of the assessee. The learned CIT (A) also observed that there is a possibility of receiving the money from the above 4 persons for the booking of the flats/shops through them. This is also corroborated from the entries shown on these seized document reflecting the booking below the name of Shri Nitinbhai Kalubhai Desai. iv. As per the learned CIT (A) in the real estate business, it is the common practice to start the activity based on oral understanding or by entering into Banakhat after making the payment of some token amount. In the present case the application was made by the partner of the firm namely Shri Nitinbhai Kalubhai Desai to Surat Sahkari Vikas Satta Mandal vide letter dated 9 March 2011 for zoning certificate which was responded by the impugned authority to Shri Nitinbhai Kalubhai Desai vide letter dated 14 March 2011 that the land of this project falls in residential zone. v. Indeed the land in question was registered dated 14 March 2012 but the payment for the same was started from June 2011 through cheques which can be verified from the sale deed. vi In view of the above, the learned CIT (A) concluded that admittedly there was cash payment made by the assessee for the purchase of land amounting to ₹16.44 crores but the source of the same was the money received against the IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 11 booking of flats/ shops. As the assessee has shown receipt from the booking amount of ₹20.10 crores in cash which is higher than the cash amount of ₹16.44 crores paid on purchase of land, there is no basis for making any addition on account of unexplained investments in the land. b. Finding of the learned CIT (A) for the addition made by the AO for ₹ 89,38,0000.00 out of ₹1,24,38,000.00 as unexplained expenditure 7.1 The learned CIT (A) deleted the addition made by the AO by observing as under: If the unaccounted income from this project is to be determined on the basis of all unaccounted cash receipts and all the expenditure including the unexplained expenditure incurred in cash has been taken care of while determining the unaccounted income from this project, as mentioned in para 7 no separate addition is required to be made on this account. Thus this addition is deleted. This ground of appeal is allowed. c. Finding of the learned CIT (A) for the addition made by the AO for ₹ 20.10 crores based on protective assessment 7.2 The learned CIT (A) found that there were seized documents showing the receipt of money against the booking of flats/shops as well as the incurrence of the expenditures for the purchase of land, construction of the project and the other expenses. Both the receipts and the expenses were not recorded by the assessee in the regular books of accounts. But there were seized documents showing both the receipts and the expenses. Admittedly, as per the seized document the entire amount of receipt shown by the assessee in the year under consideration is more than the amount of such document. Accordingly, the learned CIT (A) was of the view that the additions based on substantive parameter should be made in the year under consideration and not on the basis of protective assessment. 7.3 The assessee offered 8% of the unaccounted receipt of Rs. 20.10 crores as income whereas the AO treated the entire amount of receipt shown by the assessee for ₹ 20.10 crores as income of the assessee. In this connection the learned CIT (A) IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 12 was of the view that the 100% of the receipt cannot be treated as income of the assessee. As per the learned CIT (A) some reasonable percentage should be adopted to determine the income of the assessee. It was for the reason that the seized documents contain both the receipts as well as the expenses. Thus the learned CIT (A) was of the view that the real income earned by the assessee from its unaccounted business activities should be brought to tax. Accordingly, he was of the view that the income offered by the assessee at the rate of 8% is not adequate and accordingly directed to take 20% of the unaccounted receipt of Rs. 20.10 being Rs. 4,02,00,000/- as income of the assessee on substantive basis. The learned CIT (A) further also directed that additional income offered by the assessee for ₹ 81 Lacs should be adjusted against the addition of ₹ 4,02,00,000/-. Accordingly the learned CIT (A) allowed the ground of appeal of the assessee in part. 8. Being aggrieved by the order of the learned CIT (A) both the assessee and the Revenue are in appeal before us. The assessee is in appeal against income estimated by the learned CIT-A at the rate of 20% of the unaccounted receipt whereas the Revenue is appeal for the deletion made by the learned CIT-A in part. The ground of appeal raised by the Revenue in ITA No. 330/AHD/2018 reads as under: 1. On the facts and circumstances of the case and in law, the Id. CIT(A) has erred in law and on facts in deleting the addition of Rs.16,44,00,000/- made by the AO by considering the cash paid for purchase of land as unexplained investment u/s 69C of the Act. 1.1 On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in considering the notings in certain seized material for deleting the additions made by the AO without giving the AO a specific opportunity to comment on the import sought to be drawn on these documents, even though they were not part of the assessment order. 1.2 On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in considering the figure of 860/00 on page no.47 of Ann. A-l as pertaining to land even though the same figure of Rs.8,60,00,000/- has been shown against (g) on page no.47, against Jayeshbhai on page no.37 and against Nitinbhai on page no.4 of Ann.3, as reproduced by the Id. CIT(A) in his order, without explaining as to why this amount has been mentioned against the names of different partners of assessee LLP. 1.3 On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in arriving at the conclusion that the amounts of Rs.7,73,63,800/-, 4,00,15,8007- and 1,60,06,300/- totaling Rs.13,33,86,000/- was the amount which remained unpaid for the land purchase, which conclusion is without any basis as it is clear that the seized documents reflect the expenditure incurred in respect of the project. IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 13 1.4 On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in inferring, on the basis of page no.4 of Ann.3, that the amount of Rs.8,60,00,000/- was brought by Shri Nitinbhai as booking amount even though there are no particulars or evidence to show from whom such booking amount was received by Shri Nitinbhai or by the assessee LLP and that, therefore, the inference drawn by the -AO that Rs.l6,44 ; 00,000/- was paid in cash for purchase of the land and that source of such cash was unaccounted should have be upheld. 1.5 On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in holding that the source of cash payment of Rs.16,44,00,000/- was booking amount as per the seized documents itself, though there is no confirmation about the persons who allegedly paid the cash booking amount to the assessee LLP to make the payment. 2. On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in law and on facts in deleting the addition of Rs.89,38,000/- made by the AO as unexplained expenditure incurred in cash. 3. On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in law and on facts in deleting the addition of Rs,20,10,00,0007- on protective basis made by the AO considering the receipts as unaccounted, and by replacing the same with an addition of 20% of Rs.20,10,00,0007-, without appreciating the bifurcation of the receipts of the assessee made by the AO (subject to some arithmetical corrections, also pointed out by the assessee in its submissions before the Id. CIT(A)). 3.1 On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in directing the AO to consider only 20% of Rs.20.10 crore as income of the assessee for the year under consideration without any basis and in not upholding the entire addition of Rs.20.10 crores made by the AO. 3.2 On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in accepting the assessee's contention that the provision of section 40A are not applicable in its case on the ground that cash receipts and payments were totally out of books even though the provisions of section 40A apply to claims of all business expenses claimed by the assessee. 9. The learned AR before us filed a paper book running from pages 1 to 617 and contended that the seized documents contains the receipt and payment transactions which are of business nature. Therefore, only the element of profit embedded in such business transactions can only be brought to tax. The learned AR further submitted that tribunal in the group case of the assessee has adopted 8% percent of the unaccounted receipt as income. 10. On the contrary, the learned DR before us submitted that the income in the assessment proceedings in the case of search has to be worked out based on the documentary evidence which are clearly suggesting that the assessee has made IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 14 investment in the land out of unexplained cash credit. Likewise, the assessee has also incurred expenses out of undisclosed income. Similarly, the amount of gross receipt which was not disclosed in the financial statement should be brought to tax. 10.1 Both the learned AR and the DR before us vehemently supported the order of the authorities below to the extent favourable to them. 11. We have heard the rival contentions of both the parties and perused the materials available on record. There is no ambiguity to the fact that additions with respect to the unabated assessment years can be made based on incriminating documents found during the search under the provisions of section 153A/153C of the Act. Admittedly, in the present case, there were found incriminating documents pertaining to the assessee and therefore the proceedings against the assessee were initiated under section 153C of the Act. Based on the incriminating document, the AO has made the addition for ₹16.44 crores representing the on money in cash paid on purchase of land and the cash expenditures incurred for ₹ 89,38,000/- which were not recorded in the books of accounts in the year under consideration. However, the learned CIT (A) was of the view that the seized documents which are of incriminating nature should be read in conjunction and as a whole. According to the learned CIT (A), the seized documents were containing the figures for the receipt as well as payment of money which were not recorded in the books of accounts. As per the ld. CIT-A, additions for the receipt of money and payment of money for the expenditures cannot be made independently and individually. According to the learned CIT (A) the amount of receipt and payment was representing the business transactions. Therefore he was of the view that the element of profit based on percentage should be applied to unearth the income of the assessee from the transactions which were not recorded in the books of accounts. Thus the learned CIT (A) has directed to take 20% of the unaccounted receipt as income of the assessee. IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 15 11.1 Now the issue arises for our consideration whether the percentage of profit embedded in such unaccounted business transactions should be applied for working out the income chargeable to tax. In this connection, we note that there are plethora of judgments of Hon’ble Courts which mandate to take the element of profit with respect to the unaccounted business transactions. In this regard we find support and guidance from the order of the coordinate bench of this ITAT in case of Kishore Mohanlal Telwala reported in 107 taxman 86 where the coordinate bench in similar fact held as under: The assessee, in fact, did charge ‘on money’ in relation to booking/sale of flats in ‘H’ appartment. However, the entire receipts on account of ‘on money’ charged by the assessee on sale/booking of flats could not be the undisclosed income of the assessee for the block period because what can be taxed under Chapter XIV-B is undisclosed income and not the undisclosed receipts. During the course of hearing the assessee had brought evidence on record in regard to payments made for expenses incurred on the cost of construction for which necessary deduction had to be allowed. In any case, what can be taxed is the profit which could have been earned by the assessee on the alleged unaccounted receipts and not the entire amount. Further, the Assessing Officer had not brought any material on record that the assessee in fact had made any initial investment of Rs. 15 lakhs as alleged. In any case, even if it was assumed that the assessee did make an initial investment of Rs. 15 lakhs which was to be taxed under section 69C, the corresponding deduction would have to be allowed under section 37 as the investment was made in acquisition of business assets and as such, the amount spent was for the business of the assessee. Thus, what could be added as the undisclosed income of the assessee under section 158BC was a reasonable amount of profit which the assessee could have earned by charging ‘on money’ in respect of flats. The assessee had himself offered 8 per cent profit on the total receipts which should be considered fair and reasonable. In any case, it was to be seen that after the exhaustive search and obtaining the disclosure of Rs. 17 lakhs, the search party had not been able to find any unaccounted assets except those referred to in the statement of the assessee. The assets found at the time of search were the application of the unac- counted income of Rs. 17 lakhs which was offered to tax by the assessee in his return filed in response to a notice under section 158BC. Thus, the Assessing Officer was not justified in making the addition as the concealed income of the assessee because the profit earned on the unaccounted receipts on the basis of the special provisions at 8 per cent as per section 44AD would be less than the amount of Rs. 17 lakhs disclosed by the assessee as undisclosed income in the return filed in response to notice under section 158BC. Accordingly, the addition made by the Assessing Officer had to be deleted. 11.2 The above finding of the ITAT was also confirmed by the Hon’ble Gujarat High Court in tax appeal no. 411 of 1999. 11.3 We also find that this tribunal in the group company of the assessee namely M/s Greenfield Reality Pvt Ltd in IT(SS) No. 289/Ahd/2018 in similar facts and circumstances has directed to take the element of profit based on percentage for IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 16 working out the undisclosed income of the assessee. The relevant extract of the order is reproduced as below: 16. We have duly considered rival submissions and gone through the record carefully. On an analysis of the record, it would reveal that during the course of search not only details of on-money received by the assessee on booking of flats and shops in “Vesu Project” was found, but details of certain expenditure, which are not recorded in the books were also found. This included cash payment for purchase of land. Therefore, the ld.CIT(A) has rightly observed that the gross on-money noticed on the seized paper cannot be considered as income of the assessee. There are certain expenditures which were not recorded in the books. Those expenditure must have been made from this on-money. Therefore, after going through the well reasoned order of the ld.CIT(A), and in the light of judgment of Hon’ble jurisdictional High Court in the case of Panna Corporation (supra) as well as Koshor Mohanlal Telwala (supra), we are of the view that only element of income embedded in the on-money received by the assessee for booking of flats/shops in “Vesu Project” is required to be assessed in its hand in all these years. 11.4 In view of the above we do not find any infirmity in the finding of learner CIT (A) and accordingly we uphold the same with the direction to take some percentage of profit for working out the income from the undisclosed business transactions. 11.5 The next controversy arises to determine the rate at which the profit has to be determined. In this connection, we find that the tribunal in the group case Greenfield Reality Pvt Ltd.(supra) of the assessee involving identical facts and circumstances has adopted 8% of business receipts as income of the assessee. The relevant extract is reproduced as under: 17. Next question arose, what is the element of income involved in this on-money. On one hand, the assessee is showing income at 8%, on the other hand, the ld.CIT(A) is estimating it at 20%. It is pertinent to observe that section 144 of the Income Tax Act provides discretion in the AO to pass best judgment when an assessee failed to appear before him, and to submit requisite details. In other words, it provides power in the AO to estimate an income of the assessee. We deem it appropriate to take note the relevant part of this section. It reads as under: 18. For exercising the best judgment, section 144 of the Income Tax Act provide the guidance to the ld.AO. This section reads as under: “144. [(1)] If any person— (a) fails to make the return required [under sub-section (1) of section 139] and has not made a return or a revised return under sub-section (4) or sub-section (5) of that section, or (b) fails to comply with all the terms of a notice issued under sub-section (1) of section 142 [or fails to comply with a direction issued under sub-section (2A) of that section], or (c) having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 143, the [Assessing] Officer, after taking into account all relevant material which the [Assessing] Officer has gathered, [shall, after giving the assessee an opportunity of being heard, make the assessment] of the total income or loss to the best of his IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 17 judgment and determine the sum payable by the assessee [* * *] on the basis of such assessment : [Provided that such opportunity shall be given by the Assessing Officer by serving a notice calling upon the assessee to show cause, on a date and time to be specified in the notice, why the assessment should not be completed to the best of his judgment : Provided further that it shall not be necessary to give such opportunity in a case where a notice under sub-section (1) of section 142 has been issued prior to the making of an assessment under this section.] [(2) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.]” 19. It is pertinent to note that that section 144 would suggest that in order to estimate income, learned Assessing Officer has to exercise his discretion which should be in consonance with best of his judgment. We are conscious of the fact that in various authoritative pronouncements, it has been propounded that in making a best judgment assessment, the Assessing Officer must not act dishonestly or vindictively or capriciously. He must make, what he honestly believe to be a fair estimate of the proper figure of assessment and for this purpose he must be able to take into consideration, local knowledge, reputation of the assessee about his business, the previous history of the assessee or the similarly situated assessee. It is also pertinent to mention that judgment is a faculty to decide matter with wisdom, truly and legally. Judgment does not depend upon the arbitrary, caprice of an adjudicator, but on settled and invariably principles of justice. Thus, in a best judgment, even if, there is an element of guess work, it should not be a wild one, but shall have reasonable nexus to the available material and circumstances of each assessee. 20. During the course of hearing, we have confronted the ld.counsel for the assessee to show the basis for estimating income at 8%. Similarly, we have confronted the ld.CIT-DR as to how the figure of 20% should be taken up. The ld.counsel for the assessee drew our attention towards page nos.50-51 of the paper book wherein the assessee has kept the details of receipts received through account payee cheque as well as received cash in the booking of flats as well as shops. In the case of Koshor Mohanlal Telwala (supra) the Tribunal has observed that 8% profit offered by the assessee on the alleged gross receipts of on- money received in cash is fair and reasonable. This figure was construed as fair and reasonable by taking guidance from section 44AD of the Act, wherein it was provided by the Legislature that in case an assessee is engaged in civil construction, and if gross receipts remains under a particular slab, then such assessee needs not to maintain books of accounts, and its profit can be assumed at 8%. Though this special provision is not applicable in the present case, because gross receipts exceeded the turnover provided under section 44AD, but again we are required to find out a reasonable percentage of income which could have been alleged as earned by the assessee out of such gross receipts. This formation of opinion at the end of the Tribunal met the approval of Hon’ble Gujarat High Court in the case of Koshor Mohanlal Telwala (supra). As against this, the AO has not collected any data either from other assessees who are engaged in this line of business, and who have developed identical projects. We have perused the finding of the ld.CIT(A) also, but the ld.CIT(A) has also not mentioned any attending circumstances for harbouring a belief that 20% could have been earned from this activity. Thus after taking guidance from the judgment of Hon’ble Gujarat High Court in the case of Koshor Mohanlal Telwala (supra), we deem it proper that the assessee has rightly disclosed the profit element embedded in the gross profit at 8%. Accordingly, we allow the ground of appeal raised by the assessee, and hold that profit which has been directed to be adopted by the ld.CIT(A) at 20% of the alleged turnover should be IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 18 taken at 8%. The income of the assessee is to be computed thereafter. Consequently, ground no.2 and 3 raised by the Revenue in the Asstt.Years 2012-13, 2013-14 and 2014- 15, and ground nos.1 to 3 in the asstt.Year 2015-16riased by the Revenue are rejected. 11.6 In view of the above and respectfully following the ratio laid down by the ITAT in the group case of the assessee as discussed above, we direct the AO to take 8% of gross cash receipt which was not recounted in the books of accounts as income of the assessee. Accordingly, there cannot be any separate addition either for ₹16.44 crores or unexplained expenditures of the ₹ 89.38 lakhs. Likewise, there cannot be any addition based on protective assessment as made by the AO during the assessment proceedings. Hence, the ground of appeal of the assessee is partly allowed whereas the ground of appeal of the Revenue is dismissed. 12. The next issue raised by the assessee in ground Nos. 4 and 5 are either premature or consequential which do not requires separate adjudication. Thus we dismiss the same being infructuous. Coming to the additional ground raised by the assessee: 13. The assessee in the additional ground of appeal has challenged the validity of the assessment framed by the AO under the provisions of section 143(3) read with section 153C of the Act. 14. The learned AR before us submitted that the issue raised by the assessee in the additional ground of appeal is legal in nature and which can be admitted at any stage for the purpose of the adjudication. The learned AR in support of his claim has made reference to the judgments of Hon’ble supreme court in the case of NTPC vs CIT reported in 229 ITR 383. 15. On the other hand, the learned DR did note raise any objection on the admission of the additional ground of appeal raised by the assessee. IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 19 16. We have heard the rival contentions of both the parties and perused the materials available on record. There is no ambiguity to the fact that the assessee is empowered to raise the additional ground of appeal before any judicial forum if it is legal in nature in view of the judgments of Hon’ble Supreme Court in the case of NTPC (supra) wherein it was held as under: Under section 254, the Tribunal may after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is, thus, expressed in the widest possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, there is no reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of that item. There is no reason to restrict the power of the Tribunal under section 254 only to decide the grounds which arise from the order of the Commissioner (Appeals). Both the assessee as well as the Department have a right to file an appeal/cross-objections before the Tribunal. There is no reason why the Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier. 16.1 In view of the above, there remains no ambiguity that the additional ground being legal in nature can be admitted at any stage. Accordingly, we do not find any hesitation in admitting the same. But, at the time of hearing a query was posed to the learned counsel appearing on behalf of the assessee that what will be the impact of the income which the assessee has already offered to tax in its income tax return filed in response to the notice issued under section 153C of the Act in a situation where the assessment is held to be invalid. The learned AR could not make any satisfactory reply, rather submitted to withdraw the additional ground of appeal raised before the ITAT. Accordingly we dismiss the additional ground of appeal raised by the assessee. 16.2 In the result, the appeal filed by the assessee is partly allowed. Coming to revenue’s appeal for the A.Y. 2012-13 in IT(SS) No. 330/AHD/2018 for A.Y.2012-13. 17. The revenue has raised the following grounds of appeal: IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 20 1. On the facts and circumstances of the case and in law, the Id. CIT(A) has erred in law and on facts in deleting the addition of Rs.16,44,00,000/- made by the AO by considering the cash paid for purchase of land as unexplained investment u/s 69C of the Act. 1.1 On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in considering the notings in certain seized material for deleting the additions made by the AO without giving the AO a specific opportunity to comment on the import sought to be drawn on these documents, even though they were not part of the assessment order. 1.2 On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in considering the figure of 860/00 on page no.47 of Ann. A-l as pertaining to land even though the same figure of Rs.8,60,00,000/- has been shown against (g) on page no.47, against Jayeshbhai on page no.37 and against Nitinbhai on page no.4 of Ann.3, as reproduced by the Id. CIT(A) in his order, without explaining as to why this amount has been mentioned against the names of different partners of assessee LLP. 1.3 On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in arriving at the conclusion that the amounts of Rs.7,73,63,800/-, 4,00,15,8007- and 1,60,06,300/- totaling Rs.13,33,86,000/- was the amount which remained unpaid for the land purchase, which conclusion is without any basis as it is clear that the seized documents reflect the expenditure incurred in respect of the project. 1.4 On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in inferring, on the basis of page no.4 of Ann.3, that the amount of Rs.8,60,00,000/- was brought by Shri Nitinbhai as booking amount even though there are no particulars or evidence to show from whom such booking amount was received by Shri Nitinbhai or by the assessee LLP and that, therefore, the inference drawn by the -AO that Rs.l6,44 ; 00,000/- was paid in cash for purchase of the land and that source of such cash was unaccounted should have be upheld. 1.5 On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in holding that the source of cash payment of Rs.16,44,00,000/- was booking amount as per the seized documents itself, though there is no confirmation about the persons who allegedly paid the cash booking amount to the assessee LLP to make the payment. 2. On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in law and on facts in deleting the addition of Rs.89,38,000/- made by the AO as unexplained expenditure incurred in cash. 3. On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in law and on facts in deleting the addition of Rs,20,10,00,0007- on protective basis made by the AO considering the receipts as unaccounted, and by replacing the same with an addition of 20% of Rs.20,10,00,0007-, without appreciating the bifurcation of the receipts of the assessee made by the AO (subject to some arithmetical corrections, also pointed out by the assessee in its submissions before the Id. CIT(A)). 3.1 On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in directing the AO to consider only 20% of Rs.20.10 crore as income of the assessee for the year under consideration without any basis and in not upholding the entire addition of Rs.20.10 crores made by the AO. 3.2 On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in accepting the assessee's contention that the provision of section 40A are not applicable in its case on the ground that cash receipts and payments were totally out of books even IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 21 though the provisions of section 40A apply to claims of all business expenses claimed by the assessee. 4. On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in law and on facts in deleting the addition of Rs.5,82,24,0007-. made by AO considering loan as unexplained credit u/s 68 of the IT Act. 4.1 On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in deleting the addition on the ground that the same amount had been added in the hands of the lender without considering the argument and decisions advanced by the AO in the assessment order on this issue. 5. On the facts and circumstances of the case and in law, the Id. CIT (Appeal) ought to have upheld the order of the AO. 6. It is, therefore, prayed that the order of the Id. CIT(A) be set aside and that of the AO be restored to the above extent. 18. The revenue in the 1 st interconnected issue raised in ground Nos. 1 to 3 submitted that the learned CIT (A) erred in deleting the addition made by the AO on account on money paid for purchase of land, unaccounted cash expenses for 16.44 crore, Rs. 89.38 Lacs and restricting the income against the receipt of cash for flat booking to the tune of 20% of total receipt. 19. At the outset we note the issue raised by the Revenue has been decided along the issue raised by the Assessee in IT(SS) No. 286/Ahd/2018 vide paragraph No. 11 of this order where we have upheld the finding of the learned CIT-A to the extent of grievance of the Revenue. For the detailed discussion please refer the aforementioned paragraph. Hence the grounds of appeal raised by the Revenue is dismissed. 20. The next issue raised by the Revenue in ground No. 4 is that the learned CIT (A) erred in deleting the addition made by the AO for ₹5,82,24000/- under the provisions of section 68 of the Act on account of unexplained cash credit. 21. The assessee has shown unsecured loan from different parties in different assessment years in its books of account. The necessary details of the parties from whom the assessee has taken the loan in different assessment has been placed on IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 22 page 18 of the assessment order. The relevant summary of such loans stand as under: 1. A.Y. 2012-13 Rs. 5,82,24,000/- 2. A.Y. 2013-14 Rs. 6,61,97,000/- 3. A.Y. 2014-15 Rs. 2,33,15,180/- 21.1 The assessee in support of such loan has furnished the PAN. However, the AO was not satisfied with the creditworthiness of the parties as well as genuineness of the transactions. Besides the above, the AO also found the assessee has shown receipt of loan from two partners namely Ashit Vohra and M/s Anshunath Buildcon Pvt. Ltd. amounting to Rs. 2,60,00,000/- and Rs. 3,22,24,000/- respectively. 21.2 However, these two partners in their individual assessment proceedings failed to justify the source of investment in the LLP being the assessee and therefore, the AO treated the amount of loan received from such partners as unexplained cash credit by observing that such amount represents the unexplained cash credit. Thus, the AO made the addition of the amount of loan received by the assessee in different assessment years. 22. Aggrieved assessee preferred an appeal to the learned CIT (A). 23. The assessee before the learned CIT (A) submitted that the amount of ₹ 5,82,24,000/- does not represent the unsecured loan rather these are the capital balances of the partners in its books (the assessee). The confirmation and details of the PAN of the partners have already been furnished during the assessment proceedings. 24. The learned CIT (A) after considering the submission of the assessee deleted the addition made by the AO by observing as under: 8. The Fourth ground of appeal is against the additions of Rs.5,82,24,000/-made by the AO considering loan as unexplained credit u/s. 68 of the Act. During the year, the appellant had shown loan of Rs.3,22,24,000/- from Anusthan Buildcon P Ltd and Rs.2,60,00,000/- from Shri Asitbhai Vora. The AO stated on the basis of seized documents that Anusthan Buildcon IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 23 P Ltd and Asit Vora had unexplained funds, which were further advanced to the appellant. The AO held that the lender entities & individual neither had any identity nor creditworthiness and these transactions are not genuine. Therefore, made the additions. The appellant contended that this amount is not loan from these two persons but it is capital contribution by these partners. During the course of assessment proceedings, confirmations, with details of name, PAN, address, were submitted before the AO in the submission dated 22.2.2017 filed on 27.2.2017. Anusthan Buildcon P Ltd and Shri Asit Vora has been assessed by the same AO, therefore, doubting their identity is totally unjustified. The appellant contended that additions of the same amount has been made by the same AO in the hands of the lenders, hence, additions may be deleted. On going through the facts of the case, it is found that for the year under consideration, the AO added loan of Rs.3,22,24,000/- from Anusthan Buildcon P Ltd and Rs.2,60,00,000/- from Shri Asit Vora. Anusthan Buildcon is group concern and Shri Asit Vora is partner in the appellant LLP. Both were assessed by the same AO, therefore, their identity is well established and findings of the AO in this respect is factually incorrect. The same AO had made the additions in the hands of lender, therefore, additions in the hands of the appellant is nothing but duplication of the same amount, hence, it deserves to be deleted. The AO himself admitted that this amount is unexplained in the hands of lenders, then additions in the hands of the appellant is totally unjustified. Looking to the discussion above, additions made by the AO are not found justified, hence, these are deleted. The ground of appeal is allowed. 25. Being aggrieved by the order of the learned CIT (A), the Revenue is in appeal before us. 26. Both the learned DR and the AR before us vehemently supported the order of the authorities below as favourable to them. 27. We have heard the rival contentions of both the parties and perused the materials available on record. From the preceding discussion, we note that the assessee has shown capital contribution from the partners and this fact has not been disputed by the AO as well as by the learned DR appearing on behalf of the revenue. Thus if any addition is required to be made then it has to be in the hands of the partner and not in the hands of the assessee company. Furthermore, the AO is common to the assessee as well as to the partner of the firm and the proceedings against the partners have already been initiated. Thus, in the given facts and circumstances, we are of the view that no addition is warranted. Accordingly, we upheld the finding of the learned CIT (A). Hence the ground of appeal of the revenue is dismissed. IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 24 28. The issue raised by the Revenue in ground Nos. 5 & 6 are general in nature. Hence the same is dismissed being general and infructuous. 28.1 In the result appeal field by the Revenue is dismissed Coming to Assessee’s appeal for the A.Y. 2013-14 in IT(SS) No. 287/AHD/2018 29. The assessee has raised following grounds of appeal; 1. Ld. CIT (A) erred in law and on facts in confirming addition of Rs.42,67,200/- on substantive basis of being profit margin @ 20% of unaccounted booking receipt ignoring fact that profit element of unaccounted receipt has already been offered by the appellant. Ld. CIT (A) ought to have considered the submission of appellant and ought not to have made substantive addition as appellant offered 8% profit of unaccounted booking receipt. It be so held now. 2. Ld. CIT (A) ought to have considered profit margin for project as a whole and not for particular year and ought to have allowed telescoping of surplus / deficit in year in which profit from unaccounted booking receipt is disclosed higher as compared to determine by CIT (A). It be so held now. – 3. Levy of interest u/s 234A, 234B, 234C of the Act is unjustified. 4. Initiation of penalty proceedings u/s 271(l)(c) of the Act is unjustified. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. 30. At the outset we note issues raised by the assessee in grounds of appeal and additional grounds are identical to the issues raised by the assessee in its appeal for A.Y. 2012-13 in IT(SS) No. 286/Ahd/2018. Therefore, the findings given in IT(SS) No. 286/AHD/2018 shall also be applicable for the year under consideration i.e. AY 2013-14. The appeal of the assessee for the assessment 2012-13 has been decided by us vide paragraph Nos. 11 to 16 of this order partly in favour of the assessee. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2012-13 shall also be applied for the year under consideration i.e. AY 2013-14. Hence, the grounds of appeal filed by the assessee is partly allowed. In the result appeal filed by the assessee is partly allowed. IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 25 Coming to Revenue’s appeal for the A.Y. 2013-14 in IT(SS) No. 323/AHD/2018 31. The revenue has raised following grounds of appeal: 1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.35,00,000/-made by the AO as unexplained expenditure incurred in cash on the ground that net income of the business was being estimated, even while accepting that such expenditure was incurred in cash outside the books? 1.1 On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in considering the addition of Rs.35,00,0007- without appreciating the findings of the AO in the assessment order, the provisions of sections 40A and of the proviso to Section 69C. 2. On the facts and circumstances of the case and in law, the Id. CIT(A) has erred in law and on facts in deleting the addition of Rs.3,01,72,230/- made by the AO including addition of Rs.72,39,1807- on protective basis, and replacing it by the addition of 20% of Rs.2,13,36,000/-. 2.1 On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in accepting the assessee's contention that the provision of section 40A are not applicable in its case on the ground that cash receipts and payments were totally out of books even though the provisions of section 40A apply to claims of all expenses claimed by the assessee. 2.2 On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in not upholding the entire addition made by the AO. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.6,61,97,0007- made by AO considering loan as unexplained credit u/s.68 of the IT Act. 4. On the facts and circumstances of the case and in law, the Id. CIT (Appeal) ought to have upheld the order of the AO. 5. It is, therefore, prayed that the order of the Id. CIT(A) be set aside and that of the AO be restored to the above extent. 32. At the outset we note issues raised by the Revenue in ground Nos. 1 and 2 of its appeal are identical to the issues raised by the Revenue in its appeal for A.Y. 2012-13 in IT(SS) No. 330/Ahd/2018. Therefore, the findings given in IT(SS) No. 330/AHD/2018 shall also be applicable for the year under consideration i.e. AY 2013- 14. The appeal of the assessee for the assessment 2012-13 has been decided by us vide paragraph No. 19 of this order against the Revenue. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2012-13 IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 26 shall also be applied for the year under consideration i.e. AY 2013-14. Hence, the grounds of appeal filed by the Revenue are hereby dismissed. 33. The next issue raised by the Revenue is that the learned CIT(A) erred in deleting the addition of Rs. 6,61,97,000/- being unexplained cash credit under section 68 of the Act. 34. At the outset, we note that above amount of cash credit of Rs. 6,61,97,000.00 includes the amount received from one of the partner namely M/s Anusthan Buildcon Pvt. Ltd. for ₹ 5,81,69,900.00 which in our considered view cannot be subject to the addition under section 68 of the Act for the reason elaborated in IT(SS)A No. 330/AHD/2018 for the assessment year 2012-13. For the detailed discussion, please refer the relevant paragraph 27 of this order. 35. With respect to the balance amount of addition of ₹ 80,27,100.00 we note that learned CIT (A) has deleted the addition made by the AO by observing that the assessee has discharged its onus imposed upon it under the provisions of section 68 of the Act. As such the assessee, has furnished the addresses and PAN of the parties. The Learned CIT (A) also observed that all the parties were the income tax assessee and the transactions were carried out through the banking channel. Furthermore, these parties have given advance money for the booking of the flat. To this effect, the confirmation was also filed. At the time of hearing, the learned DR before us has not brought anything on record contrary to the finding of the learned CIT (A). Thus, we hold that the assessee has discharged its onus as provided under section 68 of the Act and therefore, no addition is warranted. Accordingly, we do not find any reason to interfere in the order of learned CIT (A). Hence, the ground of appeal filed by the revenue is hereby dismissed. 35.1 In the result appeal filed by the Revenue is dismissed. IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 27 Coming to Assessee’s appeal for the A.Y. 2014-15 in IT(SS)A No. 288/AHD/2018 36. The assessee has raised following grounds of appeal; 1. Ld. CIT (A) erred in law and on facts in confirming addition of Rs.2,93,12,164/- on substantive basis of being profit margin @ 20% of unaccounted booking receipt ignoring fact that profit element of unaccounted receipt has already been offered by the appellant. Ld. CIT (A) ought to have considered the submission of appellant and ought not to have made substantive addition as appellant offered 8% profit of unaccounted booking receipt. It be so held now. 2. Ld. CIT (A) ought to have considered profit margin for project as a whole and not for particular year and ought to have allowed telescoping of surplus / deficit in year in which profit from unaccounted booking receipt is disclosed higher as compared to determine by CIT (A). It be so held now. 3. Levy of interest u/s 234A, 234B, 234C of the Act is unjustified. 4. Initiation of penalty proceedings u/s 271(l)(c) of the Act is unjustified. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. 37. At the outset we note issues raised by the assessee in grounds of appeal and additional grounds are identical to the issues raised by the assessee in its appeal for A.Y. 2012-13 in IT(SS) No. 286/Ahd/2018. Therefore, the findings given in IT(SS) No. 286/AHD/2018 shall also be applicable for the year under consideration i.e. AY 2014-15. The appeal of the assessee for the assessment 2012-13 has been decided by us vide paragraph Nos. 11 to 16 of this order partly in favour of the assessee. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2012-13 shall also be applied for the year under consideration i.e. AY 2014-15. Hence, the grounds of appeal filed by the assessee are partly allowed. 37.1 In the result appeal filed by the assessee is partly allowed. Coming to Revenue’s appeal for the A.Y. 2014-15 in IT(SS) No. 324/AHD/2018 38. The revenue has raised following grounds of appeal: IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 28 1.On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.23,90,35,5207- made by the AO and also addition of Rs. 14,65,60,8207- on protective basis, and replacing it by the addition of 20% of Rs.14,65,60,820/-. 1.1 On the facts and circumstances of the case and in law, the Id, CIT (Appeal) has erred in accepting the assessee's contention that the provision of section 40A are not applicable in its case on the ground that cash receipts and payments were totally out of books even though the provisions of section 40A apply to claims of all expenses claimed by the assessee. 1.2 On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in holding the entire addition made by the AO. 1.3 On the facts and circumstances of the case and in law, the Id- CIT (Appeal) had erred in holding that the addition of 20% of Rs.14,65,60,8207- was included in the returned income of the assessee. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.2,33,15,1807- made by AO considering loan as unexplained credit u7s.68 of the IT Act. 3. On the facts and circumstances of the case and in law, the Id. CIT (Appeal) ought to have upheld the order of the AO. 4. It is, therefore, prayed that the order of the Id. CIT(A) be set aside and that of the AO be restored to the above extent. 39. At the outset we note issue raised by the Revenue in ground No. 1 of its appeal is identical to the issue raised by the Revenue in its appeal for A.Y. 2012-13 in IT(SS) No. 330/AHD/2018. Therefore, the findings given in IT(SS) No. 330/AHD/2018 shall also be applicable for the year under consideration i.e. AY 2014- 15. The appeal of the assessee for the assessment 2012-13 has been decided by us vide paragraph Nos. 19 of this order against the Revenue. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2012-13 shall also be applied for the year under consideration i.e. AY 2014-15. Hence, the grounds of appeal filed by the Revenue are hereby dismissed. 40. The next issue raised by the Revenue is that the learned CIT(A) erred in deleting the addition of Rs. 2,33,15,180/- being unexplained cash credit under section 68 of the Act. IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 29 41. At the outset we note issue raised by the Revenue are identical to the issues raised by the Revenue in its appeal for A.Y. 2013-14 in IT(SS) No. 323/Ahd/2018. Therefore, the findings given in IT(SS) No. 323/AHD/2018 shall also be applicable for the year under consideration i.e. AY 2014-15. The appeal of the assessee for the assessment 2013-14 has been decided by us vide paragraph No. 34-35 of this order against the Revenue. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2013-14 shall also be applied for the year under consideration i.e. AY 2014-15. Hence, the grounds of appeal filed by the Revenue is dismissed. 41. In the result appeal filed by the Revenue is dismissed. Coming to Revenue’s appeal for the A.Y. 2015-16 in IT(SS) No. 325/AHD/2018 42. The revenue has raised following grounds of appeal: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.13,35,58687/-made by the AO and also addition of Rs.8,60,00,000/- made on protective basis. 2. On the facts and circumstances of the case and in law, the Id. CIT (Appeal) has erred in not upholding the entire addition made by the AO. 3. On the facts and circumstances of the case and in law, the Id. CIT (Appeal) ought to have upheld the order of the AO. 4. It is, therefore, prayed that the order of the Id. CIT(A) be set aside and that of the AO be restored to the above extent. 43. At the outset we note issue raised by the Revenue in its appeal are identical to the issues raised by the Revenue in its appeal for A.Y. 2012-13 in IT(SS) No. 330/Ahd/2018. Therefore, the findings given in IT(SS) No. 330/AHD/2018 shall also be applicable for the year under consideration i.e. AY 2015-16. The appeal of the assessee for the assessment 2012-13 has been decided by us vide paragraph No. 19 of this order against the Revenue. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2012-13 shall also be applied IT(SS)A nos.286/AHD/2018 with 6 others Asstt. Years 2012-13 & others 30 for the year under consideration i.e. AY 2015-16. Hence, the grounds of appeal filed by the Revenue is dismissed. 43.1 In the result appeal filed by the Revenue is dismissed. 44. In the combined results, all the appeals of the assessee as well as additional grounds are partly allowed whereas the appeals of the Revenue are dismissed. Order pronounced in the Court on 05/01/2022 at Ahmedabad. Sd/- Sd/- (RAJPAL YADAV) (WASEEM AHMED) VICE PRESIDENT ACCOUNTANT MEMBER (True Copy) (True Copy) Ahmedabad; Dated 05/01/2022 Manish